TY - JOUR
T1 - Estimating permanent income and wealth of the us farm households
AU - Mishra, Ashok Kumar
AU - Paudel, Krishna P.
PY - 2011/5
Y1 - 2011/5
N2 - Farm households are unique in the way they derive income when compared to nonfarm households. Farm operators and spouses have dual income sources, from farm and off-farm activities. Further, farm households on an average possess higher wealth than nonfarm households. This article estimates permanent income for the US farm households using data from a large national farm level survey. The estimated income is then used to identify the determinants of wealth accumulation by the US farm households. Results confirm that permanent income is closely related to age of the operator, education, occupation, farm size, location and number of earners in the household. Along with age, permanent income is a significant determinant of household wealth. It was also found that the wealth-income curve is nonlinear, upward sloping, and convex. Hausman's specification test indicates that variations in farm household wealth is better explained by estimated permanent income than observed total household income. Off-farm income cannot be treated as residual or transitory income.
AB - Farm households are unique in the way they derive income when compared to nonfarm households. Farm operators and spouses have dual income sources, from farm and off-farm activities. Further, farm households on an average possess higher wealth than nonfarm households. This article estimates permanent income for the US farm households using data from a large national farm level survey. The estimated income is then used to identify the determinants of wealth accumulation by the US farm households. Results confirm that permanent income is closely related to age of the operator, education, occupation, farm size, location and number of earners in the household. Along with age, permanent income is a significant determinant of household wealth. It was also found that the wealth-income curve is nonlinear, upward sloping, and convex. Hausman's specification test indicates that variations in farm household wealth is better explained by estimated permanent income than observed total household income. Off-farm income cannot be treated as residual or transitory income.
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U2 - 10.1080/00036840802600582
DO - 10.1080/00036840802600582
M3 - Article
AN - SCOPUS:79956204353
SN - 0003-6846
VL - 43
SP - 1521
EP - 1533
JO - Applied Economics
JF - Applied Economics
IS - 12
ER -